DISP 3.3 Dismissal without consideration of the merits and test cases

Where the Ombudsman considers that the complaint may be one which should be dismissed without consideration of the merits, he will give the complainant an opportunity to make representations before he decides.29

Where the Ombudsman then decides that the complaint should be dismissed without consideration of the merits, he will give reasons to the complainant for that decision and inform the respondent.29

The Ombudsman may dismiss a complaint without considering its merits if he considers that:

1. (1)

   the complainant has not suffered (or is unlikely to suffer) financial loss, material distress or material inconvenience; or

2. (2)

   the complaint is frivolous or vexatious; or

3. (3)

   the complaint clearly does not have any reasonable prospect of success; or

4. (4)

   the respondent has already made an offer of compensation (or a goodwill payment) which is:

   1. (a)

      fair and reasonable in relation to the circumstances alleged by the complainant; and

   2. (b)

      still open for acceptance; or

5. (5)

   the respondent has reviewed the subject matter of the complaint in accordance with:

   1. (a)

      the regulatory standards for the review of such transactions prevailing at the time of the review; or

   2. (b)

      the terms of a scheme order under section 404 of the Act (Schemes for reviewing past business); or

   3. (c)

      any formal regulatory requirement, standard or guidance published by the FSA or other regulator in respect of that type of complaint;

   (including, if appropriate, making an offer of redress to the complainant), unless he considers that they did not address the particular circumstances of the case; or

6. (6)

   the subject matter of the complaint has previously been considered or excluded under the Financial Ombudsman Service, or a former scheme (unless material new evidence which the Ombudsman considers likely to affect the outcome has subsequently become available to the complainant); or

7. (7)

   the subject matter of the complaint has been dealt with, or is being dealt with, by a comparable independent complaints scheme or dispute-resolution process; or

8. (8)

   the subject matter of the complaint has been the subject of court proceedings where there has been a decision on the merits; or

9. (9)

   the subject matter of the complaint is the subject of current court proceedings, unless proceedings are stayed or sisted (by agreement of all parties, or order of the court) in order that the matter may be considered under the Financial Ombudsman Service; or

10. (10)

    it would be more suitable for the subject matter of the complaint to be dealt with by a court, arbitration or another complaints scheme; or

11. (11)

    it is a complaint about the legitimate exercise of a respondent's commercial judgment; or

12. (12)

    it is a complaint about employment matters from an employee or employees of a respondent; or

13. (13)

    it is a complaint about investment performance; or

14. (14)

    it is a complaint about a respondent's decision when exercising a discretion under a will or private trust; or

15. (15)

    it is a complaint about a respondent's failure to consult beneficiaries before exercising a discretion under a will or private trust, where there is no legal obligation to consult; or

16. (16)

    it is a complaint which:

    1. (a)

       involves (or might involve) more than one eligible complainant; and

    2. (b)

       has been referred without the consent of the other complainant or complainants;

    and the Ombudsman considers that it would be inappropriate to deal with the complaint without that consent; or

17. (17)

    there are other compelling reasons why it is inappropriate for the complaint to be dealt with under the Financial Ombudsman Service.29

The Ombudsman may dismiss a complaint without considering its merits, so that a court may consider it as a test case, if:

1. (1)

   before he has made a determination, he has received in writing from the respondent:

   1. (a)

      a detailed statement of how and why, in the respondent's opinion, the complaint raises an important or novel point of law with significant consequences; and

   2. (b)

      an undertaking in favour of the complainant that, if the complainant or the respondent commences court proceedings against the other in respect of the complaint in any court in the United Kingdom within six months of the complaint being dismissed, the respondent will: pay the complainant's reasonable costs and disbursements (to be assessed if not agreed on an indemnity basis) in connection with the proceedings at first instance and any subsequent appeal proceedings brought by the respondent; and make interim payments on account of such costs if and to the extent that it appears reasonable to do so; and

2. (2)

   the Ombudsman considers that the complaint:

   1. (a)

      raises an important or novel point of law, which has important consequences; and

   2. (b)

      would more suitably be dealt with by a court as a test case.29